Memory lane – Positive post-war progress

The Canadian Construction Association (CCA) was established in 1918 to help advise the federal government in the forthcoming post-war reconstruction period. A similar situation existed after World War II. It and the previous prolonged Depression had generated a huge pent-up demand for construction of all types. As a consequence, there was a severe shortage of some types of construction materials. A unique example of government-industry co-operation came into being. The CCA established a committee on materials with a mandate to identify and then verify those of a serious nature and to make recommendations for their relief. Reconstruction Minister C.D. Howe thereupon provided the committee with office space and access to the department’s resources. The recommendations, one of which involved subsidizing the production of cast iron hot water radiators, greatly helped to overcome the shortages.

The demand for construction and the lifting of war-time price and wage controls led to rising prices and ‘escalator’ provisions. The CCA conducted a campaign urging the presidents of key manufacturers and suppliers to provide firm-price quotations. This in turn led to firm-price bids by contractors being the “norm’ by 1949.

Major CCA successes in promoting desirable federal legislation were also achieved. As three examples, the Trans-Canada Highway Act and amendments to the National Housing Act and the Income Tax Act were enacted, all in accordance with CCA recommendations.

Today, with virtually constant requests by the provincial and municipal governments for federal funding for infrastructure projects, it may sound astonishing, but the CCA’s main efforts were directed at the provincial governments urging them to accept federal funding for highways! The protection of “provincial rights” was a strong rallying cry at the time and the provision of roads came under provincial jurisdiction.

The CCA conducted an education program based on the United States’ experience. There the provision of roads was a State constitutional right, but comprehensive federal funding had been accepted under the Inter-State Highways Program for many years. As an example, the CCA invited the president of the American Association of State Highway Officials to be a convention speaker. He gave assurances that the state governments administered all of the highway projects receiving federal financial assistance and without any loss of their “states’ rights”. His text and those of other similar guest speakers and article-writers received widespread publicity. In time, the opposition began to soften, and the Canadian government introduced a bill in Parliament for the Trans-Canada Highway Act with an initial budget of $150 million. The Minister of Public Works, Robert Winters, expressly thanked the CCA for its assistance.

Upon advice that the National Housing Act was due for revision, the CCA submitted to the Canadian government a two-page summary of all of its detailed recommendations in this area. When the bill was introduced in Parliament, it was most gratifying that every one of the association’s points had been adopted.

The CCA Housing Committee was very active. It was chaired by J.L.E. (Jack) Price, a prominent Montreal general contractor who also built veterans’ housing as his post-war contribution. He was also chair of the Canadian Legion’s Housing Committee. His mark-up on a house built for a veteran was $50.

Most construction companies were closely held family firms. During World War II many of them had been busy and had accumulated sizeable surplus funds. However, if these funds were distributed to the company’s owner(s), they would be subject to heavy income tax. Accordingly, most such monies were un-distributed. Family farms faced a similar situation and relief had been given to them whereby, upon payment of a relatively nominal tax, the funds could then be distributed tax-free.

The CCA contended that in the construction industry “family firms were like family farms” and should enjoy similar relief. This was accommodated in an amendment to the Income Tax Act concerning closely-held corporations and was a win–win situation: the government received additional tax revenues and construction company owners were relieved from onerous ‘double taxation’.